Product Management

How to use the Impact Effort Matrix for Product Management (Real Example)

Let’s look at how to use the Impact Effort Matrix for Product Management.

The Impact Effort Matrix is a tool that is often used in product management to prioritize and plan the development of new features or products. This matrix helps product managers to balance the potential impact of a new feature or product against the effort required to develop it, in order to make informed decisions about which ideas to pursue.

Here is how to use the Impact Effort Matrix in product management:

  1. Identify a list of potential new features or products. This can be based on customer feedback, market research, or other sources of information.
  2. Evaluate the potential impact of each feature or product. This can be based on factors such as the value it will provide to customers, the potential for increased sales or revenue, or the ability to improve the overall customer experience.
  3. Evaluate the effort required to develop each feature or product. This can be based on factors such as the complexity of the feature or product, the resources and expertise required to develop it, or the amount of time it will take to complete.
  4. Plot each feature or product on the Impact Effort Matrix. This matrix typically has two axes: the y-axis represents the potential impact of the feature or product, and the x-axis represents the effort required to develop it. Features or products that have a high potential impact and low effort required will be plotted in the top-right quadrant, while those with low potential impact and high effort required will be plotted in the bottom-left quadrant.
  5. Prioritize and plan the development of each feature or product. Based on the location of each feature or product on the matrix, product managers can prioritize and plan the development of the most impactful and feasible ideas first, and defer or eliminate those with low impact or high effort. This can help to ensure that the development process is efficient and effective, and that the product delivers the greatest value to customers.

Here is an example of how the Impact Effort Matrix can be used in product management:

Imagine that a product manager is evaluating a list of potential new features for a mobile app. The features on the list include adding a new payment method, implementing personalized recommendations, and introducing a loyalty program.

To use the Impact Effort Matrix, the product manager would first evaluate the potential impact and effort required for each of these features. For example, adding a new payment method might have a high potential impact (because it would make the app more convenient for customers) but a low effort required (because the payment provider has a well-documented API), while implementing personalized recommendations might have a moderate potential impact (because it would improve the user experience) but a high effort required (because it would require complex algorithms and data analysis).

Once the potential impact and effort required for each feature have been evaluated, the product manager can plot them on the Impact Effort Matrix. In this example, the payment method feature would be plotted in the top-right quadrant, the personalized recommendations feature would be plotted in the middle-right quadrant, and the loyalty program feature would be plotted in the middle-left quadrant.

Based on the location of each feature on the matrix, the product manager can prioritize and plan the development of the features. In this example, the payment method feature would be prioritized first because it has a high potential impact and low effort required, followed by the personalized recommendations feature because it has a moderate potential impact and moderate effort required. The loyalty program feature might be deferred or eliminated because it has a low potential impact and high effort required.

By using the Impact Effort Matrix, the product manager can make informed decisions about which features to develop and prioritize, and ensure that the development process is efficient and effective. This can help to deliver the greatest value to customers and improve the overall success of the product.